Slovak industrial production increased by 2.1% y/y in June and when seasonally adjusted, industrial output remained unchanged m/m, data published by the Slovak Statistics Office (SU SR) on August 10 show.
The annual numbers were influenced mainly by increases in manufacturing (growth of 2.8% y/y). On the other hand, supplies of electricity, gas, steam and air-conditioning components decreased (-2.7%) and mining and quarrying fell by -4%.
“Reasons behind lower industrial output in June lie in a lower production of less exports-oriented segments (furniture, textile), problems of the metallurgical industry with iron ore supplies and the continuing drop in energy and mining,” said Lubomir Korsnak, chief economist of UniCredit Bank Czech Republic and Slovakia.
“Conversely, in accordance with expectations, the industry was driven particularly by automobile makers.”
The car industry and to some extent chemical industry saved Slovak industry from falling into red numbers in June.
“Although the car industry didn't see any tangible m/m uptick, the last year's two-week strike at Volkswagen served to lower the basis of comparison, hence its y/y growth actually accelerated from 8.1% to 10.4%,” Korsnak said.
Despite weak numbers, Slovak industry is optimistic. The main risk is a potential escalation of trade tension between the USA and the EU, Korsnak said.
“The outlooks of our main trading partners - particularly the eurozone - remain solid, despite a few slightly negative risks. Among the top risks are the rise of protectionism and potential escalation of a trade war," said Slovenska Sporitelna analyst Katarina Muchova.
In the period January-June, industrial output rose by 1.6% y/y. Manufacturing rose in this period by 3.1%, whereas output sunk by 8.9% in mining and quarrying, and by 6.4% in supplies of electricity, gas, steam and air-conditioning.
Average nominal monthly in industry increased by 4.7% y/y to €1.131 in June and employment rose by 2.2% y/y in June.